Motor insurance premiums have more than doubled in the past 14 years, according to new reports.

Latest figures from the AA’s quarterly British Insurance Premium Index show that the average annual car insurance premium stands above £720 - £20 more than it did a year ago.

This is bad news for motorists already faced with rocketing fuel prices and car tax hikes and industry sources are already hinting that the worst is yet to come.

According to the AA, premiums are likely to go higher because underwriters are still making losses. For every £100 premium paid underwriters are paying out £112, it added.

The AA began collating premiums in 1994 when the average cost was just £328 a year.

Hayley Parsons, Chief Executive of insurance comparison website Gocompare.com, said: "This will be the last thing consumers want to hear on top of inflation busting increases to energy bills, petrol and food prices.”

Additionally, the AA index shows that young drivers, who typically buy third party, fire and theft insurance and already pay the highest car insurance premiums, are hardest hit because they are the most likely to make a claim.

The AA also said that since the last Index in March 2008, more than £45 has been piled on to the average premium they can expect to be quoted, which is now £884.